Does Korea follow Japan in foreign aid? Relationships between aid and foreign investment

Kang, Sung Jin; Lee, Minsoo; Park, Bokyeong

doi:10.1016/j.japwor.2010.06.001

Cited by 45 publications

(22 citation statements)

References 21 publications

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“…Similar to the Kimura and Todo (2010) study, Kang et al (2011) provides a micro level analysis as to how foreign aid is related to FDI by two countries -Korea and Japan. As with the previous studies, this study did not reveal a strong relationship between foreign aid and FDI.…”

Section: Literature Reviewmentioning

confidence: 98%

Impact of Foreign Aid on Foreign Direct Investment in South Asia and East Asia

Quazi¹,

Williams²,

Baldwin³

et al. 2014

IBR

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This study analyzes the impact of foreign aid on foreign direct investment (FDI) inflows in selected countries in East Asia and South Asia -two regions that have received huge foreign aid as well as FDI inflows. Theoretically, foreign aid can either facilitate FDI by funding projects that raise the marginal productivity of capital, or crowd out FDI as the number of investment opportunities in developing countries is usually limited. Using the FGLS (Feasible Generalized Least Squares) panel estimation methodology with 1995-2012 panel data from 7 East Asian and 7 South Asian countries, this study finds that the impact of foreign aid on FDI is significantly positive and robust across several model specifications. The estimated results also suggest that FDI is significantly affected by corruption control, rate of return, infrastructure, human capital, market potential, and political stability, and East Asia enjoys a locational advantage in attracting FDI vis-à -vis South Asia. These results further our knowledge of the foreign aid-FDI dynamics in developing countries.

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Section: Literature Reviewmentioning

confidence: 98%

Impact of Foreign Aid on Foreign Direct Investment in South Asia and East Asia

Quazi¹,

Williams²,

Baldwin³

et al. 2014

IBR

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“…When foreign firms are contracted to implement aid projects, they may gain information on the operational environment and learn about conducting business in a particular setting. This effect has been found for both Japanese and Korean aid projects (Blaise, 2005;Kimura & Todo, 2010;Kang, Lee, & Park, 2011). Moreover, successful implementation of a donor-funded project can provide a signal to private investors about the commitment of local governments to expedient permitting, enforcement of contracts, and timely co-financing or subsidy arrangements, potentially alleviating risks to projects that involve foreign participants (Bayer, Dolan, & Urpelainen, 2013;Bayer, Marcoux, & Urpelainen, 2013).…”

Section: General Theoretical Perspectivesmentioning

confidence: 90%

Encouraging clean energy investment in developing countries: what role for aid?

Buntaine

Pizer

2014

Climate Policy

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A large portion of foreign assistance for climate change mitigation in developing countries is directed to clean energy facilities. To support international mitigation goals, however, donors must make investments that have effects beyond individual facilities. They must reduce barriers to private-sector investment by generating information for developers, improving relevant infrastructure, or changing policies. We examine whether donor agencies target financing for commercial-scale wind and solar facilities to countries where private investment in clean energy is limited and whether donor investments lead to more private investments. On average, we find no positive evidence for these patterns of targeting and impact. Coupled with model results that show feed-in tariffs increase private investment, we argue that donor agencies should reallocate resources to improve policies that promote private investment in developing countries, rather than finance individual clean energy facilities. Policy relevanceWe suggest that international negotiations could usefully shift the focus of climate change finance towards adaptation in exchange for mitigation-improving policy reforms in developing countries. There is little evidence that mitigation-related financing is having broader effects on energy production, so new financial arrangements should be the focus of future negotiations. Additionally, international donors should focus efforts on reforming policies to attract private investment.

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“…32, 164À165). According to an analysis by Kan, Lee, and Park (2011), among DAC countries, it is only South Korea and Japan whose aid has a statistically significant correlation with the inflow of foreign direct investment (FDI) to the aid recipient countries. Despite the good will of Kan, Lee and Park in demonstrating some common positive characteristics of Japanese and Korean ODA, close linkage between ODA and FDI would be rather a source of criticism from DAC members for tying the aid with the commercial interests of donor countries.…”

Section: Elements Of the So-called Korean Modelmentioning

confidence: 99%

Asian Regionality and Post-2015 Consultation: Donors’ Self-Images and the Discourse

Yamada¹

2016

International Perspectives on Education and Society

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. ABSTRACTThis chapter highlights the characteristics of Asia through the analysis of policy-related documents by five donor countries,

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Does Korea follow Japan in foreign aid? Relationships between aid and foreign investment

Cited by 45 publications

References 21 publications

Impact of Foreign Aid on Foreign Direct Investment in South Asia and East Asia

Impact of Foreign Aid on Foreign Direct Investment in South Asia and East Asia

Encouraging clean energy investment in developing countries: what role for aid?

Asian Regionality and Post-2015 Consultation: Donors’ Self-Images and the Discourse

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